The Asia and the Pacific region is now home to more than half of the world’s urban population. Our cities are vibrant explosions of growth, innovation, and opportunity. They are also where inequality is most concentrated - and injustice and despair can be most visible.

These opposing forces and the tensions they create is unpacked in the 2026 Asia-Pacific SDG Partnership Report, Inclusive Urban Futures: From Inequality to Opportunity, jointly developed by ESCAP, ADB, and UNDP. Maybe we do not go far enough, to draw out the depth and scale of what the urban centers of Asia face. But suffice to say that it gives the reader a clear picture of current state, and what urban futures in this region could look like. 

Rapid urbanization is the existential reality for more than 2.2 billion people across the region. Asia is home to more billionaires than any other region and, at the same time, nearly 700 million people live in slums or informal settlements. While 83 percent of people in cities have access to the latest technologies including AI, more than 65 percent of urban workers remain informally employed, and AI has yet to make most of their lives better. While some of the cutting edge medical research and operations are conducted in these cities, more than 2.3 billion people breathe unsafe air daily. 

Urbanization has been the magic beans that accelerated economic growth and lifted millions out of poverty, especially in countries like China, India and Southeast Asia. But without deliberate action, it is the same force now that is deepening disparities in housing, employment, environmental livability and affordability for urban dwellers across Asia.

The vast sprawling informal sector is at the hearts of some of these conundrums, and hence choices. Informal work sustains millions of urban livelihoods and keeps cities working by collecting waste and cleaning the streets, building homes and stores, producing and delivering food and so on. These workers keep local economies open for business. At the same time, they themselves enjoy few benefits of better pay, guaranteed benefits, safety and legal protections. Can the next stages of urban development confront and address this phenomenon?

Drawing on UNDP’s experience across Asia and the Pacific, I shared three lessons at the 13th Asia-Pacific Forum on Sustainable Development that are critical to shaping more inclusive urban futures (the full intervention can be watched ‘live’ here).

First, productivity and protection must advance together

More than 60 percent of workers in the region now live and work in urban areas. For many, informality is not a temporary phase; it is a long-term condition. Inclusion strategies, therefore, cannot rely on rapid or wholesale formalization alone.

In this context, tackling improved productivity and better protections must go hand-in-hand. Informal workers are often excluded from skills development, access to finance, and technology that can improve their output, safety and dignities. Without these planned investments that have mutual benefits to employer and employee, informality becomes a poverty trap with no mobility.

Low productivity is compounded by the absence of basic social protection, occupational safety, and income security. When shocks strike, whether economic downturns, health crises, or climate-related disasters, informal workers are the first to absorb the impact, and the first to go. Our experience shows that productivity gains with basic protections can significantly reduce inequality, create new opportunities and create an urban workforce that is more ready for the future.

Second, legal recognition can bring dignity without rigidity

One of the most tangible changes city governments and private sector can introduce is the legal recognition of informal workers, particularly those providing essential municipal services. Across the region, governments are beginning to move away from all-or-nothing approaches to various degrees of informal workforce formalization. So, rather than forcing informal workers into a single-size regulatory framework, cities are introducing adaptive forms of recognition that preserve flexibility while extending basic protections.

Nepal offers a practice. Selected groups of municipal service workers have been legally recognized without being absorbed into traditional employment structures. This has enabled access to certain protections with clearer rights and responsibilities, and improved working conditions, without undermining livelihoods. Cambodia is another illustration where legal protections have been allowed 380,000 informal workers - 230,000 of them women - to register for health and maternity insurance. 

For UNDP, this kind of adaptive regulation is a critical pathway to a better job market and to better human development outcomes. Legal recognition is not only about contracts or compliance. It is about dignity, visibility, and voice in urban systems that often depend on informal labour but fail to acknowledge it.

Third, coalitions-of-the-willing and the right technologies can shift the trajectory

Advancing a more inclusive urban development requires alliances between city and national governments, and with local businesses and financing institutions, irrespective of political affiliations. Two partnership pathways have proven particularly impactful. 

The first connects informal groups to small, medium, and larger enterprises as integral suppliers in their value chains, and this significantly improves income predictability and job quality. Combined with targeted skilling and capability-building, these connections help workers move into higher-value activities while strengthening the backward linkages into the local economy. In sectors such as garments, food processing, waste management and circular economy, such alliances have been supported also by partners, such as UNDP with the Coca-Cola Foundation, and have shown how inclusive business models can improve livelihoods while delivering environmental gains.

The second pathway is the smart applications of technology. Technology is often seen as a threat to informal jobs. Our experience shows the opposite when technologies are specifically designed to improve safety, efficiency, and dignity rather than displace. Simple innovations in equipment, digital payments, or work organization can reduce risks, raise incomes, and improve access to services for those living in the informal sector. 

Transmission chains of opportunity and prosperity

The scale of the region’s urban challenge is undeniable. Yet Asia Pacific cities also hold extraordinary potential. Inclusive urban futures will not be built by eliminating informality. They will be built by recognizing informal workers as central actors in urban economies; investing in their productivity; extending protections; and forging partnerships that push out those value chains even further into more remote and rural communities. Such formal-informal and rural-urban bridges that transmit opportunity and prosperity for many more will be essential to that next stage of equitable economic growth and human development progress.